President Obama will be signing the legislation. However, the White House issued a statement hours after the bills passage stating “[W]e do not support, including a provision that contravenes longstanding U.S. policy towards Israel and the occupied territories, including with regard to Israeli settlement activity.” White House Press Secretary Josh Earnest said in a statement:

We are pleased the Senate passed the bipartisan Customs conference report because it will provide additional tools to help crack down on unfair competition by trading partners and foreign companies that put our workers and businesses at a disadvantage. As with any bipartisan compromise legislation, there are provisions in this bill that we do not support, including a provision that contravenes longstanding U.S. policy towards Israel and the occupied territories, including with regard to Israeli settlement activity.

The legislation references “any territory controlled by Israel” or “Israeli-controlled territories” seven separate times, making it the first U.S. legislation effectively defining Israel as including occupied Palestine, essentially recognizing the territory of Palestine and Israel as one entity.

“The provision puts the US firmly on record opposing BDS and supporting enhanced commercial ties between the United States and Israel,” AIPAC said in a statement Thursday. “This measure builds on the important work of Congress … passing into law firm anti-BDS negotiating objectives for American trade negotiators.”

Within 180 days after the bill becomes the law, the US administration will be required to report to the Congress on global BDS activities, including the participation of foreign companies in political boycotts of the Jewish State. It also includes a number of legal protections for American companies that operate in Israel.

While the Obama administration has long expressed adamant opposition to BDS tactics targeting Israel, there are several references in the legislation to “Israeli-controlled territories” or “any territory controlled by Israel” as being applicable to the terms of the bill.

Relevant provisions included in the legislation include:

(b)

Statements of policy

Congress—

(1)

supports the strengthening of economic cooperation between the United States and Israel and recognizes the tremendous strategic, economic, and technological value of cooperation with Israel;

(2)

recognizes the benefit of cooperation with Israel to United States companies, including by improving American competitiveness in global markets;

(3)

recognizes the importance of trade and commercial relations to the pursuit and sustainability of peace, and supports efforts to bring together the United States, Israel, the Palestinian territories, and others in enhanced commerce;

notes that boycotts of, divestment from, and sanctions against Israel by governments, governmental bodies, quasi-governmental bodies, international organizations, and other such entities are contrary to principle of nondiscrimination under the GATT 1994 (as defined in section 2(1)(B) of the Uruguay Round Agreements Act (19 U.S.C. 3501(1)(B)));

(6)

encourages the inclusion of politically motivated actions that penalize or otherwise limit commercial relations specifically with Israel such as boycotts of, divestment from, or sanctions against Israel as a topic of discussion at the U.S.-Israel Joint Economic Development Group (JEDG) to support the strengthening of the United States-Israel commercial relationship and combat any commercial discrimination against Israel; and

(7)

supports efforts to prevent investigations or prosecutions by governments or international organizations of United States persons solely on the basis of such persons doing business with Israel, with Israeli entities, or in any territory controlled by Israel.

(c)

Principal trade negotiating objectives of the United States

(1)

Commercial partnerships

Among the principal trade negotiating objectives of the United States for proposed trade agreements with foreign countries regarding commercial partnerships are the following:

(A)

To discourage actions by potential trading partners that directly or indirectly prejudice or otherwise discourage commercial activity solely between the United States and Israel.

(B)

To discourage politically motivated boycotts of, divestment from, and sanctions against Israel and to seek the elimination of politically motivated nontariff barriers on Israeli goods, services, or other commerce imposed on Israel.

(C)

To seek the elimination of state-sponsored unsanctioned foreign boycotts of Israel, or compliance with the Arab League Boycott of Israel, by prospective trading partners.

(2)

Effective date

This subsection takes effect on the date of the enactment of this Act and applies with respect to negotiations commenced before, on, or after such date of enactment.

Not later than 180 days after the date of the enactment of this Act, and annually thereafter, the President shall submit to Congress a report on politically motivated boycotts of, divestment from, and sanctions against Israel.

(2)

Matters To Be Included

The report required by paragraph (1) shall include the following:

(A)

A description of the establishment of barriers to trade, including nontariff barriers, investment, or commerce by foreign countries or international organizations against United States persons operating or doing business in Israel, with Israeli entities, or in Israeli-controlled territories.

(B)

A description of specific steps being taken by the United States to encourage foreign countries and international organizations to cease creating such barriers and to dismantle measures already in place, and an assessment of the effectiveness of such steps.

(C)

A description of specific steps being taken by the United States to prevent investigations or prosecutions by governments or international organizations of United States persons solely on the basis of such persons doing business with Israel, with Israeli entities, or in Israeli-controlled territories.

(D)

Decisions by foreign persons, including corporate entities and state-affiliated financial institutions, that limit or prohibit economic relations with Israel or persons doing business in Israel or in any territory controlled by Israel.

(e)

Certain foreign judgments against United States persons

Notwithstanding any other provision of law, no domestic court shall recognize or enforce any foreign judgment entered against a United States person that conducts business operations in Israel, or any territory controlled by Israel, if the domestic court determines that the foreign judgment is based, in whole or in part, on a determination by a foreign court that the United States person’s conducting business operations in Israel or any territory controlled by Israel or with Israeli entities constitutes a violation of law.

(f)

Definitions

In this section:

(1)

Boycott of, divestment from, and sanctions against Israel

The term boycott of, divestment from, and sanctions against Israel means actions by states, nonmember states of the United Nations, international organizations, or affiliated agencies of international organizations that are politically motivated and are intended to penalize or otherwise limit commercial relations specifically with Israel or persons doing business in Israel or in any territory controlled by Israel.